Silence No More: Understanding California’s Laws Against Secret Harassment Settlements

On January 1, 2022, California’s Silenced No More Act (SB 331) went into effect,
expanding current restrictions on non-disparagement and nondisclosure clauses in settlement agreements. Non-disparagement clauses are contractual provisions that prohibit employees from saying negative things about their company, and nondisclosure agreements (NDAs) prohibit employees from disclosing specific information about their company. SB 331, therefore, sought to strengthen non-disparagement and NDA restrictions, expanding protections for employees dealing with workplace harassment, discrimination, or retaliation. Expanding on SB 820 (past legislation), SB 331 made it more difficult for employers to use legal agreements to censor employees’ complaints regarding workplace wrongdoing. As SB 820 mainly pertained to sexual harassment, SB 331 now works to cover all kinds of protected features, not limited to only sexual harassment cases.

I. Impact of SB 331 on Retail Brand Settlements
California’s Silenced No More Act restricts confidentiality in settlements. Prior to its establishment, many large retail brands typically included NDAs in settlement agreements with employees to limit outside knowledge of workplace disputes. Now, SB 331 places NDA restrictions and prohibits NDAs from silencing former employees from disclosing factual details of unlawful workplace harassment, retaliation, or discrimination claims in California.

In simple terms, if retail brands were to settle a workplace harassment case, they cannot legally silence their employee about what happened as part of that settlement. This means that protections regarding all types of unlawful workplace conduct are now significantly expanded.

The previous law mainly focused on sexual harassment cases and sex discrimination; however, SB 331 now prohibits all forms of harassment, discrimination, and retaliation based on protected characteristics under the California Fair Employment and Housing Act (FEHA).
Examples of Protected Characteristics Under FEHA
● Race
● Religion
● Sex/Gender
● Sexual Orientation
● Gender expression or gender identity
● Disability
● Martial status
● National Origin
California’s Silenced No More Act applies to all FEHA-protected categories. In other words, a retail brand settlement involving harassment based on any of the characteristics outlined above is prohibited from using NDA restrictions to prevent an employee from discussing the factual basis of the unlawful misconduct. For retail brand settlements that involve claims with these characteristics, they must remove the NDAs that prohibit discussion of the pertinent factual misconduct. It is important to note that certain confidentiality can still apply, however, with limits. Retail brands still have the authority to protect their trade secrets, keep the settlement amount confidential, and protect business information unrelated to unlawful acts.

Retail brands can still include non-disparagement clauses or NDAs, provided the clauses specifically state that they do not prohibit employees from speaking about unlawful workplace harassment. Any action to silence an employee regarding the misconduct itself would make that part of the agreement void. It is important to note that retail brands must also include separation agreements that provide employees with allocated time to consult an attorney.

Meaning, California retail brands are required to review and revise their settlement templates to ensure compliance with SB 331 and avoid unenforceable confidentiality clauses. Retail brands can resolve disputes quietly in some respects; however, they cannot legally silence employees about the unlawful misconduct itself. As a result, retail employers cannot rely on non-disparagement clauses and broad confidentiality provisions to limit reputational harm when resolving claims arising from workplace harassment or other forms of misconduct.

II. Right to Speak out Despite Previous NDAs
SB 331 increases employees’ ability to speak about unlawful workplace conduct, even if an NDA agreement was previously signed. Sections of NDA agreements that prohibit an employee from sharing factual information regarding the unlawful workplace harassment, discrimination, or retaliation are not legally enforceable. An employer, therefore, cannot rely on NDA restrictions to silence their employees about unlawful misconduct.

Employees who sign contracts that include either a confidentiality or non-disparagement clause must specifically have carve-out language stating that “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace” to be enforceable.

Without this type of language explicitly carved out, the clause could be unenforceable and therefore void. Privacy protections are still possible, and employees have the right to keep their identity confidential as part of a settlement. Identifying details can be requested to remain private for employees settling claims, and employees have the right to choose privacy.

It is important to note that this confidentiality must be voluntary and employee-driven. If these two criteria are met, an employer is prohibited from forcibly silencing an employee in speaking about unlawful conduct. The employee can protect their personal privacy; however, they cannot be required to give up their legal rights to discuss what happened.

Under SB 331, employers are no longer allowed to require workers to sign non-disparagement clauses or broad confidentiality clauses that waive disclosure rights as a condition of keeping or getting a job, receiving severance, or securing other benefits, unless strict legal requirements are met.

Agreements must provide adequate notice, allow time for review and consultation with an attorney, and include carve-out language. If an employer does not meet these requirements, the constraining provisions may be invalid. Overall, California’s Silenced No More Act shifted power away from enforced silence and promotes workplace transparency, while still permitting lawful confidentiality in limited, clearly defined circumstances.

III. Shift Toward Corporate Transparency in California
With laws such as SB 331, California has positioned itself as a leader in workplace accountability, passing legislation to reduce secrecy around unlawful conduct. SB 331 signals a broader policy shift towards transparency, especially in challenging confidentiality agreements that were used to hide patterns of workplace harassment, discrimination, and retaliation.

By restricting the legality of certain non-disparagement and nondisclosure provisions, California has sought to protect employees’ rights to speak about unlawful acts, outweighing traditional corporate preference for private dispute resolution. This shift impacts how companies, including large retail brands, structure severance packages, employment agreements, and settlement terms.

Businesses must now draft contracts that clearly prohibit unlawful restrictions on employees’ discussions of factual information about workplace misconduct. Weakening NDA restrictions (particularly in misconduct and discrimination cases) has been linked to increased reporting of corporate problems, greater pressure on companies to address internal systemic issues, and greater media coverage.

Employees also feel freer to share information due to these weakened NDAs, leading companies to adapt governance, compliance, and public engagement strategies to protect their corporate reputation and investor perceptions. Therefore, organizations are now placing greater emphasis on clear internal reporting systems, compliance reviews, and preventive compliance strategies to avoid public disputes. Transparency is no longer just important for reputation; it is now a legal requirement embedded in employment practices.

Conclusion
California’s Silence No More Act significantly strengthens employees’ rights by allowing them to speak out about unlawful workplace harassment, discrimination, and retaliation, even if they have signed previous nondisclosure agreements.

While NDA restrictions can still protect proprietary business information and trade secrets, they are prohibited from silencing workers in relaying factual information about the case regarding workplace misconduct.

SB 331 has empowered retail employees to share their experiences without fear of retaliation. This new law doesn’t just apply to new agreements. It also works to clarify that existing and past provisions aren’t enforceable to the extent they restrict disclosures of unlawful acts.

The law requires non-disparagement provisions to clearly preserve disclosure rights while limiting employers’ ability to silence workers through restrictive clauses in settlements, severance agreements, or employment agreements. Retail brands that rely on consumer trust and public image to boost market value must now alter their risk management strategies.

Legal teams must now ensure that settlement agreements comply with SB 331, recognizing that certain allegations may become public. Resultly, brands are placing a higher emphasis on internal investigations, preventive compliance, and overall culture reform, rather than focusing primarily on confidently limiting fallout.

SB 331 also works to balance both transparency and legitimate confidentiality, allowing companies to protect trade secrets, proprietary information, and certain settlement details. In response to concerns about employer exploitation, lawmakers have worked to ensure that recurring patterns of unchecked workplace harassment are no longer lawful. SB 331 reinforces public policy advocacy for openness over secrecy in the workforce.

For retail brands working in California, SB 331 marks a decisive cultural shift as well, as they must focus on demonstrating commitment to equitable workplace practices, ethical leadership, and open transparency. SB 331 not only reshapes settlement drafting practices but also contributes to a broader shift in how companies approach governance, risk, and public trust.

Overall, California’s Silence No More Act encourages clearer reporting and compliance practices, promotes corporate accountability, and cultivates a workplace culture in California that prioritizes transparency and legal compliance.